Next Autoworks is scrambling to see if there’s a way to raise some desperately needed capital after withdrawing its request for a Department of Energy loan, money the automotive start-up was counting on to begin producing a new line of low-cost, high-volume cars.

After getting earlier indications that the loan request under the DoE’s Advanced Technology Vehicle Manufacturing (ATVM) program would likely go through, Next was given word, earlier this week that the application would instead be rejected. Sources close to the project suggest Next – and others seeking DoE loans – have been hamstrung by the political turmoil in Washington.

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“New companies with new ideas are the lifeblood of future job creation in the United States,” said Kathleen Ligocki, Next Autoworks Company’s CEO and a one-time senior executive at Ford Motor Co. “The most powerful funding combination is one of public-private partnership, especially in capital-intensive manufacturing industries which have the most power for permanent employment for the broadest group of people. Still, in the current reality, there are many demands on public capital and choices must be made.”